Equity Volatility Impact

Equity Volatility Impact measures how fluctuations in the value of collateral affect the margin health of an account. Because crypto assets are highly volatile, the value of the collateral backing a position can change rapidly.

If the collateral value drops, the account may quickly approach its maintenance margin requirement even if the position itself remains stable. The margin engine must account for this volatility when calculating the effective equity of the user.

High equity volatility requires more frequent margin updates and potentially higher maintenance margins. Understanding this impact is essential for traders who use volatile assets as collateral for their derivative positions.

It directly influences the probability of being liquidated.